D.C. Defends Paying People to Live Near Work

After I expressed skepticism (shared by Matt Yglesias) about the value of the Office of Planning's $200,000 pilot program to match employer grants of up to $6,000 for people who move close to where they work or close to transit, the Office of Planning sent over some reasons why it's a good idea. Here's what they said:

Over two thirds of jobs in the District are held by non-D.C. residents. Some employers have informed us that anywhere from 73% to 96% of their employees live outside the District.

Housing close to work often can be more expensive than farther away, depending upon the locations. However, living farther away from work, particularly outside of D.C., can double or triple a household’s transportation costs. This depends on how much they drive and how many cars they own to serve the household’s daily needs. Unfortunately, no mortgage lending products take into account a household’s potential transportation cost savings and allow the buyer to afford more when the home is close to the buyer’s employer, or otherwise reduces their transportation costs.

Some D.C. employers subsidize employee parking upwards of $10,000 over a five year period. LNYW is an alternative that can provide longer lasting benefits to both the employer and the employee.

LNYW is one of the first programs of its kind offered by the District that asks participating private employers to contribute and leverage its dollars toward assisting an employee in the purchase of a home. The other existing home-buying assistance programs in the District, such as the Home Purchase Assistance Program, use only local or federal funds.

Finally, the program is a pilot because we want to examine who benefited from the program and how they benefitted. The intent is to collect information on the 30-60 households and how this program affected their commutes and transportation costs. The program would only be continued and expanded if the study is able to measure the program’s benefits and resources are available.

OK, all fair points, especially if D.C. can get employers to use funds they might otherwise spend on parking subsidies. But my main takeaway is that this is less of a "live near your work" program than a "live in the District" program–because D.C. benefits exponentially more from having someone move here from Maryland or Virginia than it benefits from having someone move from one part of the District to another. It's basically like the $5,000 homebuyer tax credit, except not just for first-timers, funded through OP's capital budget instead of a straight federal tax credit*, and also matched by the private sector.

Here's the thing: Living in the District is already attractive. By and large, the problem is affordability, not motivation, and $12,000 is a drop in the bucket when it comes to buying a half million dollar house (the people to whom it would matter most are likely renters anyway). The best way to get people to live near where they work is to help create affordable housing, and the best way to get people to live near transit is to make transit an excellent service. The places where affordability isn't as much of a problem–say, around the new Department of Homeland Security headquarters at St. Elizabeths–$12,000 might make the difference between buying a house or not. But the bigger obstacles are crime, schools, walkability, and public spaces that people find essential to their quality of life.

Anyway, I'm open minded, and will be interested to see the results.

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* Corrected from "locally-funded," which is not precisely the same thing as capital funding, which comes from a variety of sources.

Excellent points Lydia. It feels like another way to ensure, entrench?, "gentrification."

Eric

RobShaw, your statement is confused. People moving to DC is not in and of itself gentrification. In the event of gentrification a neighborhood's quality of life may be improved, it may become more diverse, and some people may leave. Overall, more people living in the District is good for the tax base, especially if they also work here.

Lydia, I would be more curious to see whether the $12,000 would be used as a down payment on a home. For many people, adding up a down payment of $12,000 to a $300,000 condo loan could mean the difference between buying in DC or buying in PG, far from work.

Ward 7 resident

I work professionally as an urban/housing planner in the metro region. Therefore, I concur with your remarks about making the creation of affordable housing a reality. However, understanding municipal budget crunches, I must state that there are plenty of existing affordable homes in the District (within blocks of Metrorail and Metrobus stops). The problem is neighborhood perception - which most often is incorrect. I live in Ward 7 (one block from a Metro) where there are plenty of affordable homes and apartments. I've not once been harmed, threatened or had my belongings taken (for those who automatically assume crime is a given in this area).

For the record, there are safe, affordable communities to live in East of the River (that aren't located in Anacostia - for the record all of East of the River is not Anacostia as I've heard ignorant folks state this). Therefore, the $12k pilot program as well as deprogramming folks' perceptions of certain communities would go a long way in supporting Live Near Your Work initatives while providing ancillary benefits (reduced traffic congestion, improved health, strengthened neigborhood stability, etc.)

Mrs. D

It really depends on the cash-on-hand situation of the buyer whether or not this money would help. If you are shy of a down payment or closing costs, this could be the difference between buying and renting. Even people who can afford a mortgage sometimes have trouble finding the cash to get the purchase rolling. These people are usually first-time homebuyers, as mentioned, who ALSO would get the $5K tax credit, furthering the benefits of moving to the district!

However, there's also another group today that this could help, and that's non-first-time homebuyers whose suburban homes have declined in value to the point that they'll get little to no equity out of them. They could ALSO be in the situation of not having the cash on hand to move to a new home, but being able to afford the mortgage otherwise.

Your point that this won't make a home that is otherwise out of someone's reach affordable stands, though. It would only shave about $2500/yr. off the income requirements to qualify for a mortgage. Not exactly making a home that is otherwise out of one's reach attainable.

District Resident

Live Near Your Work? Ha!

I can't even work where I live.
I've lived inside the city limits for over a decade and my only job offers come from Reston and Gaithersburg.
I would love to switch places with these people.

washcycle

There is one change that could make it easier to live near where you work, but that's at the Federal level. Currently you can deduct your moving expenses if you're moving for work and if your new home and work are something like 50 miles away from your old one. I would make two changes to that. 1. I'd only allow you to take the deduction if your new home is at least 8 miles from your new job. 2. I'd allow you to take the deduction as long as you are moving at least 50% closer to your work, regardless of whether you've changed jobs or, if you did, how far those jobs are apart - basically getting rid of the 50 mile rule. Both of these would encourage people to live closer to work.

This is a very interesting discussion. I think that you bring up some great points about living in the District. I definitely know that there are Washington DC condos available very close to the major DC employers. An agent can find a condo that fits your needs very close to your work.